FD, RD and PPF differ first in how money enters the account and how long it stays there. A fixed deposit usually starts with a lump sum, a recurring deposit collects regular monthly instalments, and Public Provident Fund is a government savings account with a long original term and an annual contribution limit. A post office time deposit is another lump sum account. The product name alone does not tell you its payment schedule, withdrawal conditions or interest calculation.
For a dated comparison, India Post's official savings page, checked on 13 November 2026 at 22:11 IST, displayed RD interest of 6.7% a year, compounded quarterly, PPF interest of 7.1%, compounded yearly, and time deposit rates ranging from 6.9% to 7.5% depending on the period. These are the figures displayed on that page at the check time. They are not a single rate applicable to every bank FD or RD.
| Account | How deposits work | Important distinction |
|---|---|---|
| Bank FD | Lump sum | Tenure and payout option belong to the bank's product |
| Bank RD | Fixed monthly instalments | Missed instalments can attract penalties |
| PPF | Annual contribution, in one payment or instalments | Rs 500 minimum and Rs 1.5 lakh maximum annually |
| Post office TD | Lump sum time deposit | India Post displays a rate range by deposit period |
FD vs RD: lump sum or monthly instalments?
State Bank of India's term deposit page provides a concrete bank example: the minimum deposit is Rs 1,000, the minimum term is seven days, and the maximum term is ten years. Those are SBI product conditions. They should not be presented as universal terms for every institution or every special deposit scheme.
SBI says term deposit interest is payable quarterly or at maturity with principal. For deposits of twelve months or longer, monthly, half yearly or yearly payments may also be requested. Consequently, two accounts carrying an identical annual interest rate may send money to the account holder on different schedules. A payout deposit and an account that retains interest are different cash flow arrangements.
An RD spreads the principal payments across the saving period. SBI's recurring deposit page specifies a term of twelve to 120 months and a minimum monthly instalment of Rs 100, followed by multiples of Rs 10. Its interest rate follows the applicable term deposit rate for public and senior citizen customers.
A simple contribution example shows why maturity amounts cannot be compared by rate alone. Twelve monthly payments of Rs 1,000 add up to Rs 12,000 of principal. A Rs 12,000 FD begins with all that principal already deposited. In the RD, later instalments arrive later. Even before comparing compounding conventions, the money has spent different amounts of time in the account. This example compares contributions, not maturity proceeds or promised returns.
PPF deposit limit, tenure and interest rules
PPF is not a monthly instalment contract like the SBI RD described above. SBI's PPF page permits a lump sum or instalments, with annual deposits between Rs 500 and Rs 1.5 lakh. It states an original duration of fifteen years and provision for extension in blocks of five years. The government determines the interest rate quarterly.
That last point matters when reading a rate comparison. The displayed PPF rate should not be multiplied across fifteen future years as though every future quarter had already been fixed. The annual contribution limit also means that an unrestricted lump sum deposit and a PPF contribution cannot automatically accommodate the same amount of money.
SBI says PPF interest uses the minimum account balance between the fifth day and the end of a month, with interest paid on 31 March. It also states that amounts deposited above the annual maximum do not earn interest. The balance used for interest, the permitted contribution and the payment date are separate rules, each relevant to understanding an account statement.
What happens if payments stop or money is needed early?
For its RD, SBI charges a penalty for delayed instalments and says six consecutive missed instalments lead to premature closure, with the balance paid to the holder. It also lists premature withdrawal penalties. The original maturity illustration therefore cannot be treated as the amount payable after an interrupted payment schedule or an early exit.
PPF loans and withdrawals depend on the account's age and specified balances, according to SBI. It is not equivalent to closing an ordinary bank deposit on demand. Our separate guides explain PPF withdrawal eligibility and the RD calculation method in more detail.
The useful comparison is therefore a set of account terms: initial money required, future contributions, maturity period, interest payment frequency and early access conditions. Post office schemes also have their own closure provisions, as explained in our post office MIS closure guide. A headline percentage answers only one part of that comparison; it does not establish that one account is suitable for every purpose.
